Dow jittery over looming 'fiscal cliff'

Investors drew little hope Wednesday for a quick compromise in U.S. budget talks after President Barack Obama insisted that higher taxes on wealthy Americans would have to be part of any deal.

Stocks fell sharply, and even a signal from the Federal Reserve that it could launch a program in December to speed job growth failed to encourage investors. The Dow Jones industrial average dropped 185.23 points to close at 12,570.95.

Sal Arnuk of Themis Trading, a New Jersey brokerage, said, "The Street was looking for him to say some magic buzzwords about avoiding the 'fiscal cliff,' about cooperation." The fiscal cliff is a package of tax increases and government spending cuts that will take effect Jan. 1 unless the president and Congress reach a deal. They would total about $700 billion for 2013 and some fear it could result in a recession.

Stocks have fallen steadily since voters returned Obama and a divided Congress to power Nov. 6. The Dow has fallen 675 points, or 5.1 percent.